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'Citizen Kane' Studio Goes up For Sale


By the Financial Times ( Financial Times) -- The Culver Studios, where a mocked-up Atlanta burned to the ground in "Gone With The Wind," will go up for sale this week with its owners hoping that the history of one of Hollywood's oldest independent lots will attract a $150 million-plus offer from a trophy-hunting international business mogul.

Built in 1918 by Thomas Ince, the silent movie pioneer, the studios have been owned by Cecil B. DeMille, RKO's Joseph Kennedy and Howard Hughes. Their 13 sound stages have been home to epics including King Kong, Rebecca and Citizen Kane; more recent films including State of Play; and television series from Lassie to America's Next Top Model.

Pacific Coast Capital Partners, Lehman Brothers and Picbengro, a private vehicle for an undisclosed New York investor, bought the studios from Sony for $125 million in 2004, later selling a series of office buildings for about $50 million.

The owners tried to sell before the 2008 financial crisis, attracting offers of more than $150 million, but were caught out by the market collapse that brought down Lehman, said Jamie Cella, chief executive. It is expected to announce within days that it has appointed CB Richard Ellis, the property agent, for the sale.

"This is an iconic trophy. I've always felt I was a steward of history because it's been owned by all the kings of Hollywood," Cella said. "The interest in 2008 came from entertainment entities and some real estate opportunity funds, but now we see the market being driven by more international players."

The sellers hope to attract wealthy emerging markets bidders, Cella said. "It's like when [the Sultan of Brunei] bought the Beverly Hills Hotel [in 1987]. It made no sense financially, but he was right and I was wrong. Over time, the value has increased."

Kevin Shannon, a vice chairman with CB Richard Ellis, said studio properties were outperforming the weak office market. "The fundamentals for entertainment have been improving and the trend for this studio specifically has been improving," he said.

The Culver Studios represented an unusually large site with potential for development in west Los Angeles, "LA's most desirable sub-market", he said, and "an emotional property"

Shannon said he expected "entertainment moguls and high net worth people" from nearby Beverly Hills and Malibu and from "several continents" to show interest. Ren-Mar Studios, where I Love Lucy was filmed, was sold last year to the entrepreneur behind Oakley sunglasses.

Cella would not disclose details of the Culver Studios' finances but said the current owners had increased profitability as they cut staff from about 60 to 48, erected new buildings and secured permission to build another 200,000 square feet of new office space. Known in the RKO years as "40 Acres", the site never covered more than 29 acres and is now 14 acres.

Despite a growing television production market, sales had dropped since the financial crisis set in as big studios make fewer films and Hollywood faces more competition from other U.S. states and international locations offering tax breaks to filmmakers.

"It'll come back, because California is where filmmakers should be. The weather is better and you can fake a lot of places in California. You can fake New York in LA, where you can't do that in New Mexico or Georgia," Cella said. "Other places don't have the city grit New York or Chicago have. You see something shot in Toronto and think 'that's too clean'," he said.

The sale comes after Pinewood Shepperton's largest shareholder was blocked by another investor this summer from taking the UK studio behind James Bond private. Viacom's Paramount Pictures last week announced plans to spend $700 million over 25 years to improve its 62-acre Hollywood studio lot and neighbouring properties.

‚óŹ Paramount announced a restructuring on Tuesday that will combine its home entertainment, digital and licensing businesses into one division, reporting to Dennis Maguire, its current home entertainment president. Viacom released no details about the financial impact of the move, which reflects a fast-changing film market where DVD sales are declining and online streaming services from companies, including Netflix and Amazon, are gaining ground.

The changes will also centralise global theatrical management operations in Los Angeles and fold Paramount's online games and digital content creation activities into other businesses.

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